Chapter 1 Introduction to Marketing What is marketing o AMA marketing is the activity set of institutions and processes for creating capturing communications delivering and exchanging offering that have value for customers clients partners and society at large Core aspects of marketing o Marketing helps create value Production oriented era before 1920 Most firms were production oriented and believed that a good product would sell itself Concerned with production innovation and not customer satisfaction Sales oriented era 1920 1950 Firms were experiencing over production They found a solution of heavy personal selling and advertising Market oriented era after world war 2 Focus towards consumer products because of new suburban lifestyle Customers made decisions based on quality convenience and price Market research before designing products Value based marketing current Firms generally have transcended a production or selling orientation and attempt to discover and satisfy their customers needs and wants Give their customers greater value than their competitors o Marketing is about satisfying customer needs and wants The marketplace can be segmented or divided into groups of people who are pertinent to an organization for particular reasons Example Coke vs Pepsi creates men vs women calorie conscious or not people who prefer carbonated vs non carbonated drinks Because marketing costs money good marketers can fully seek out potential customers who have both an interest in product and the ability to buy target audiences o Marketing entails an exchange The trade of things of value between the buyer and the seller so that each is better off as a result Sellers provide products or services then communicate and facilitate the delivery of their offering to consumers o Marketing requires product price place and promotion decisions Promotion communicating values Communication by a marketer that informs persuades and reminds potential buyers about a product or service to influence their opinions and elicit a response Place delivering value All activities necessary to get the product to the right customer when that customer wants it Marketing channel management set of approaches and techniques that firms employ to efficiently and effectively integrate their suppliers manufacturers warehouses stores and other firms involved in the transaction into a seamless value chain in which merchandise is produced in the right quantities to the right locations and at the right time while minimizing system wide costs and satisfying the service levels required by customers problem merchandise isn t available when people want it because of a lack of detail behind the scenes Price capturing value Everything the buyer gives up money time and energy in exchanged for the product Marketers determine the price of the product carefully depending on the basis of the potential buyer s belief about its value The key is to determine the prices that customers are willing got pay so that they are satisfied with the purchase and the seller achieves a reasonable profit Product creating value Goods items you can physically touch services intangible customer benefits that are produced by people or machines and cannot be separate from the producer and ideas to satisfy customer needs concepts opinions and philosophies intellectual concepts Ice cream example good frozen yogurt service frozen yogurt shop and idea frozen yogurt is healthier than ice cream o Marketing can be performed by both individuals and organizations B2C business selling to consumers B2B selling of merchandise or services from one business to another C2C consumers to consumers ebay o Marketing occurs in many settings and impacts various stakeholders Partners in supply chain include wholesalers retailers or intermediaries Aimed to benefit an entire industry or society at large Breakdown of a product marketing plan o How the product or service will be conceived or designed o How much it should cost o Where and how it will be promoted o How it well get to the consumer Four activities that firms focus on to become value driven o Sharing information Share info about customers and competitors and integrate it across the firm s various departments Critical success factor of any firm o Balancing benefits worth costs Firms measure the benefits that customers perceive against the cost of their offerings they use available customer data to find opportunities to better satisfy their customers needs keep costs down and develop long term loyalties o Building relationships with customers Relational orientation marketers have realized that they need to think about their customers in terms of relationships rather than transactions To build relationships firms focus on the lifetime profitability of the relationship not how much money is made during each transaction CRM a business philosophy and set of strategies programs and systems that focus on identifying and building loyalty among the firm s most valued customers then use that information to target their best customers with the products services and special promotions that appear most important to them o Connecting with customers using social and mobile media Why is marketing important 3 quarts of us companies now use social media tools for marketing purposes 46 of internet users worldwide interact with social media on a daily basis 77 of the world subscribes to mobile services Problem access to high speed internet 46 of hotel bookings are done through the internet o marketing expands firm s global presence enhances global career opportunities for marketing professionals example Coke MTV Ahold o marketing is persuasive across marketing channel members firms do not work in isolation raw material manufacturer retailer consumer o marketing enriches society developing greener products making healthier foods options safer products and reducing carbon footprints both strategy and for customer best interest shows trust in their consumer marketplace o marketing can be entrepreneurial center of marketing s success are entrepreneurs vision of how certain combinations of products and services can satisfy unfilled needs Chapter 5 The Marketing Environments Factors that affect the marketing environment summary o Center consumers o Points of the triangle immediate action of the focal company company s competitors or corporate partners o Outside points macroenvironment culture demographics political legal economic Factors affect the
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